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on Confederation of Independent States |
| By: | Solanko, Laura |
| Abstract: | This paper provides an overview of the major changes in Russia's macroeconomic policies since the early 1990s. For decades, the quest for economic stability and security have been leading principles of Russian macroeconomic policies. To understand the genesis of these macroeconomic policy choices the paper first provides a chronology of macroeconomic policies from the early 1990's to the aftermath of the global pandemic thirty years later. The second part describes how since the fullscale invasion on Ukraine, Western economic sanctions and the emerging war economy have fundamentally changed Russia's policy choices in fiscal and monetary policies as well as in Russia's trade relations. |
| Keywords: | Russia, fiscal policy, monetary policy |
| JEL: | O10 P20 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bofitb:325489 |
| By: | Novoselova, Anna |
| Abstract: | Russia considers multilateralism to be an instrument for promoting and managing multipolarity. It regards the UN as an important component of the international system and would like to see it reflect a multipolar world order, which in Russia's rhetoric is marked by the dominance of principles of sovereignty and non-interference. This shapes Russia's approach to the UN development pillar, where it seeks to advance its geopolitical interests, including countering Western influence. Financially, Russia remains a marginal player in the UN development pillar. Between 2018 and 2022, it was the smallest contributor to UN development activities among the five permanent members of the UN Security Council (P5) and ranked 23rd among all UN member states. In terms of international professional staff, the share of Russian nationals in the UN system has remained below 1 per cent over the past five years, with the majority concentrated in the UN Secretariat. However, its diplomatic missions - particularly in New York and Geneva - are relatively well-staffed and are recognised for their diplomatic skills and expertise. Lacking prominent material weight, Russia leverages diplomatic and rhetorical tools to project its power. It portrays itself as an "anti-colonial leader" and champion of the Global South. Russia positions itself as an advocate of an alternative approach to development cooperation, affirming in its rhetoric that developing countries have the right to independently choose their model of socio-economic development without external influence or pressure. In line with this, it rejects the imposition of what it argues are Western liberal values on developing states - which it equates with conditionality in development assistance and infringement on sovereignty - and presents itself as a defender of what in Russian discourse are referred to as "traditional values", which are usually in opposition to individualism and progressivism. Although Russia's arguments resonate among Global South states - because they tap into legitimate grievances - there are cases in which its rhetoric appears instrumental and does not match its practices. While Russia's material capacity to project its power and position itself as an alternative development partner is limited, its diplomatic efforts, rhetoric and ability to capitalise on the grievances of the Global South as well as Western double standards amid global power shifts position it as a noticeable actor in UN development work, suggesting it should not be prematurely disregarded based on its modest role as a donor. Main takeaways: • Strategic use of UN development pillar: Russia engages in UN development work as a platform to advance its broader geopolitical objectives and its view of the international system, including positioning itself rhetorically as a counterweight to Western influence. While already politicised to some extent, this further reinforces the role of UN development work as a stage for power politics. • Diplomatic leverage: Although Russia's material weight in UN development pillar is modest, it uses diplomatic channels and discursive engagement in decision-making processes across UN entities and fora to pursue its interests. • Anti-colonial narratives and normative contestation: Russia rhetorically appeals to the grievances of the Global South and challenges Western-driven norms and approaches to development. It promotes the vision of a multipolar world order with Moscow as one of the poles of power. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:idospb:325838 |
| By: | Dinarte-Diaz, Lelys; Gresham, James; Lemos, Renata; Patrinos, Harry A.; Rodriguez-Ramirez, Rony |
| Abstract: | This paper provides insights into human capital investments during wartime by presenting evidence from three experiments of an online tutoring program for Ukrainian students amid Russia's invasion of Ukraine. Conducted between early 2023 and mid- 2024, the experiments reached nearly 10, 000 students across all regions of Ukraine. The program offered three hours per week of small-group tutoring in math and Ukrainian language over six weeks, and used academic and psychosocial tools to address student challenges at different intensities of disruption. Results show that the program led to substantial improvements in learning-up to 0.49 standard deviations in math and 0.40 standard deviations in Ukrainian language-and consistent reductions in stress-up to 0.12 standard deviations. High take-up and engagement rates were observed, and four mechanisms were identified as drivers of impact: structured peer interactions, improved attitudes toward learning, enhanced socio-emotional skills, and increased student investments. A complementary experiment using information nudges to increase parental engagement highlights challenges in promoting parental investments in a conflict setting. The program was cost-effective across all experiments, with benefit-to-cost ratios ranging from 31 to 56, and scalable given its reliance on existing infrastructure and teaching capacity. |
| Keywords: | Ukraine, wartime, tutoring, student achievement, mental health |
| JEL: | I21 I24 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1663 |
| By: | Dirks, Maximilian W. |
| Abstract: | Geopolitical conflicts significantly reshape global investment patterns, potentially creating unexpected economic opportunities. Using the Russian invasion of Ukraine as a quasi-exogenous shock, this study estimates the impact of redirected foreign direct investment (FDI) flows on economic output in bloc-free countries following this major geopolitical event. Employing a Difference-in-Differences model using Orbis Crossborder investment data, the findings reveal a sharp decline in Western FDI into Russia and Russia-leaning countries, alongside a significant increase in cross-border investment in bloc-free nations, with Brazil, India, Mexico, and Saudi Arabia among the primary beneficiaries. Using a Bayesian VAR, I estimate that these windfall FDI have increased GDP in the recipient countries by up to 2 %, underscoring the economic benefits associated with geopolitical neutrality. |
| Abstract: | Geopolitische Konflikte verändern die globalen Investitionsmuster erheblich und können unerwartete wirtschaftliche Chancen eröffnen. Die russische Invasion in die Ukraine bietet die Möglichkeit, die Auswirkungen umgeleiteter ausländischer Direktinvestitionen (FDI) auf die Wirtschaftsleistung blockfreier Länder im Zuge dieses bedeutenden geopolitischen Ereignisses zu untersuchen. Unter Verwendung eines Differenz-in-Differenzen-Modells und von Orbis-Daten zu grenzüberschreitenden Investitionen zeigen die Ergebnisse einen starken Rückgang westlicher FDI in Russland und russlandfreundlichen Staaten sowie einen deutlichen Anstieg der Investitionen in blockfreien Ländern. Zu den Hauptnutznießern zählen Brasilien, Indien, Mexiko und Saudi-Arabien. Mittels eines Bayesianischen VAR-Modells schätze ich, dass diese exogenen Direktinvestitionen das BIP in den Empfängerländern um bis zu 2% gesteigert haben - ein Befund, der die wirtschaftlichen Vorteile geopolitischer Neutralität unterstreicht. |
| Keywords: | Foreign direct investment, geoeconomics, fragmentation |
| JEL: | F21 F23 F51 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:325493 |
| By: | Michael Alexeev; William Pyle; Jiaan Wang |
| Abstract: | Although it has been speculated that the pain and dislocation of the early 1990s left Russians with an abiding distaste for the values that animated the transition from communism, the quantitative evidence for a lasting effect is thin. Drawing on a large, regionally representative survey from 2010, we show that in regions where the embrace of liberal values declined most in the early 1990s, support for democratic values remained weakest a generation later. Instrumenting for the change in values in the early 1990s with variables that capture Soviet-era economic distortions, we connect the vulnerability of a region to the market liberalization shock of 1992 to its diminished support for liberal political values in both shorter and longer runs, particularly for the older cohorts who would have experienced the early 1990s as adults. The endurance of the effect of the early 1990s economic shock stands in contrast to research from other contexts that the attitudinal effects of economic shocks experienced after early adulthood are short-lived. We speculate that a possible explanation for why the effect of the early 1990s endures in Russia was the amplification of the economic shock by an “identity shock” related to Russia’s post-imperial loss of status. In support of this hypothesis, we use multiple waves of the Integrated Values Survey (IVS) to show that in Russia, the demand for democratic values declined in the first half of the 1990s relative to other former communist countries, opening a values gap that persisted through at least 2017. Lastly, we draw on a recent survey experiment to show that respondents primed to consider the economic collapse of the early 1990s, and to a lesser extent the dissolution of the Soviet Union, are less likely to embrace democratic values than those in a control group. |
| Keywords: | market transition, macroeconomic shock, democratic values, Russia |
| JEL: | D72 D81 E32 P00 P20 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12095 |
| By: | Evžen Kočenda; Peter Albrecht; Daniel Pastorek |
| Abstract: | We investigate the impact and propagation of geopolitical risk among oil-based energy commodities. First, we endogenously identify key geopolitical events affecting the connectedness among the oil-based commodities and then evaluate their transitory and persistent impacts. We identify four major shocks that resulted in persistent shifts in connectedness: the 9/11 attacks, the Crimea crisis, the political shift in Nigeria, and the Russian invasion of Ukraine. Using a quantile-based framework, we demonstrate that volatility transmissions due to geopolitical risk are not uniform but significantly depend on market conditions. Notably, heating oil and crude oil are identified as primary transmitters of risk, especially during economic turmoil. We quantify the negative economic and financial impacts of geopolitical risks through a multivariate dynamic portfolio analysis and through an impact on the profitability of ten global banks with high exposure to oil commodities. Our findings enhance the understanding of how geopolitical shocks influence connectedness and informed portfolio decisions, highlighting the need for adaptive strategies in finance. |
| Keywords: | geopolitical risk, extreme market conditions, oil-based energy commodities, volatility connectedness, transitory and persistent effects, portfolio composition and hedging, global banks with high exposure to oil |
| JEL: | C32 C58 G15 Q02 Q35 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12133 |
| By: | Natalia Fabra; Clément Leblanc; Mateus Souza |
| Abstract: | The 2021-2023 European energy crisis, triggered by the war in Ukraine, led to broad policy interventions in energy markets. In contrast to the retail-side measures and public transfers implemented elsewhere, Spain and Portugal targeted the wholesale electricity market through the so-called Iberian solution. We quantify the distributional implications of the crisis and this market intervention on Spanish electricity firms and across consumer groups. We find that the crisis shifted substantial wealth from consumers to generators, with regressive impacts among consumers. Conversely, the policy’s relief was progressive, delivering larger gains to lower-income groups. |
| Keywords: | energy crisis, electricity markets, distributional implications, machine learning |
| JEL: | L94 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12093 |
| By: | Joop Age Harm Adema; Lasha Chargaziia; Yvonne Giesing; Sarah Necker; Panu Poutvaara |
| Abstract: | Refugees' decisions to return after conflict carry significant political and economic implications for the origin and host countries. We examine how conflict resolution, security, economic conditions, and corruption influence return decisions. To estimate the causal effect of post-war conditions, we conducted a single-profile conjoint experiment among 2543 Ukrainian refugees across 30 European countries. Respondents were asked how likely they would be to return to Ukraine under different hypothetical scenarios. Results show that territorial integrity and security guarantees are critical, while economic prospects and combating corruption also play an important role. Refugees planning to return are more responsive to different post-war scenarios, and younger respondents are particularly influenced by income opportunities, job prospects, and potential EU accession. Our findings suggest that targeted political and economic reconstruction policies can substantially influence post-conflict return. In the most optimistic scenario, the expected return rate is 47%; in the most pessimistic scenario, only 3%. |
| Keywords: | refugees, return migration, conflict, integration, Ukraine, conjoint experiment |
| JEL: | F22 D74 O15 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12118 |
| By: | Aydın, Yaşar |
| Abstract: | Turkey's geopolitically motivated industrial and supply chain policy implies close ties to Germany as well as a security and economic policy orientation towards the EU. Ankara wants to bring production and sales into line with EU standards and establish a green high-tech and services economy. However, its decarbonisation measures remain inadequate. Turkish stakeholders see disruptions to global supply chains as creating the opportunity to relocate European production chains to Turkey (near-shoring). The government, the private sector and business organisations are all working to expand sustainable energy supplies. Turkey's authoritarian domestic policy - namely, the dismantling of democracy, repression and disregard for the rule of law - makes it extremely difficult to deepen bilateral cooperation. Despite close economic ties, there are normative differences between Germany and Turkey and consistent strategy to overcome them is lacking. Rather, the Turkish government is focused on using industrial policy to compensate for shortcomings in the rule of law. Amid the geopolitical tensions between the United States and China, Turkey is performing a delicate balancing act: it is maintaining its ties to the West while at the same time expanding its technology partnership with China and energy cooperation with Russia German policy towards Turkey requires a strategic rethink. It should endeavour to promote economic stability, strengthen Turkey's security policy integration into Europe and counteract Ankara's strategic rapprochement with Moscow and Beijing. Going forward, cooperation should be made conditional on democracy, the rule of law and human rights. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swprps:325477 |
| By: | Manuel Hidalgo Pérez (Universidad Pablo de Olavide); Natalia Collado (Universidad de Comillas); Ángel Martínez Jorge (AFI) |
| Abstract: | The outbreak of the COVID-19 pandemic and Russia’s invasion of Ukraine in early 2022 severely disrupted energy markets, triggering a spike in global oil prices. To mitigate the impact on consumers, Spain introduced a fuel discount of 20 cents per liter, effective until the end of 2022. This study assesses the pass-through of the discount to retail prices using a combination of regression discontinuity (RD), difference-in-differences (DiD), and quantile regression approaches with daily data from over 11, 000 Spanish petrol stations. We analyze how different types of operators—vertically integrated, branded, and independent—responded to the policy and examine its impact on the retail price distribution. The results reveal a negative relationship between a station’s initial price and the pass-through of the discount, with lower-priced stations raising prices more in response to the policy. This pattern is particularly pronounced for diesel and among independent and retailer-managed branded stations, which captured a larger share of the subsidy. The quantile regressions further highlight that price increases were concentrated in the lower end of the price distribution, amplifying differences across station types. However, our DiD analysis shows that these effects were temporary, with price differentials gradually converging after approximately 36 to 43 days. Overall, the findings highlight how generalized public discounts can temporarily distort market dynamics and affect competitive conditions in the market. The study offers insights for the design of future subsidy programs, particularly regarding the role of market structure and financial constraints in shaping pass-through. |
| Keywords: | pass-through, discount, retail fuel prices, market structure, regression discontinuity, DiD, quantile regression. |
| JEL: | D12 Q41 Q48 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pab:wpaper:25.01 |
| By: | Wataru Kodama (International Fund for Agricultural Development); Dina Azhgaliyeva (Asian Development Bank); Peter Morgan (PJM Consulting) |
| Abstract: | Literature links food insecurity to adverse welfare outcomes, including the educational performance of children. This paper investigates whether food insecurity, exacerbated by recent food inflation, has hindered schoolchildren’s recovery from learning loss following coronavirus disease-related school closures. We examine this relationship using household data collected in 2023 from nine countries (Afghanistan, Armenia, Georgia, Kazakhstan, the Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, and Uzbekistan)—severely affected by food inflation. Our data document high severity of food insecurity and limited perceived learning progress after schools reopened in many countries. Using a novel instrumental variable, the relative severity of food inflation compared to general inflation, we find a causal link between households’ food insecurity and delays in learning progress after schools reopened. This effect is particularly pronounced among schoolchildren in higher grades and those who experienced longer durations of school closure, suggesting that food insecurity hampered recovery from learning loss during the school closure. |
| Keywords: | food inflation;food security;learning progress;Central Asia and Caucasus;South Asia |
| JEL: | I32 I24 Q18 D12 |
| Date: | 2025–09–17 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:021552 |
| By: | Dominika Langenmayr; Mikayel Tovmasyan; Sebastian Vosseler |
| Abstract: | Are sanctions bypassed by hiding money offshore? Using bilateral data on bank deposits, we compare how offshore deposits from sanctioned versus nonsanctioned countries develop after the U.S. and the EU impose financial sanctions. Sanctions targeting individuals increase offshore deposits, as (potential) targets attempt to hide their funds. Broader financial sanctions reduce offshore (and other foreign) deposits, as money is repatriated. A synthetic control case study of Russia following the annexation of Crimea confirms our main findings, showing a 15% post-sanction increase in offshore deposits. These findings highlight the limits of symbolic sanctions and the need for secondary sanctions and financial surveillance. |
| Keywords: | Sanctions, tax havens, illicit financial flows |
| JEL: | F51 H12 K42 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:bav:wpaper:243_langenmayr_tovmasyan_vosseler.rdf |
| By: | Dominika Langenmayr (KU Eichstätt-Ingolstadt, WU Vienna, CESifo); Mikayel Tovmasyan (KU Eichstätt-Ingolstadt); Sebastian Vosseler (KU Eichstätt-Ingolstadt) |
| Abstract: | Are sanctions bypassed by hiding money offshore? Using bilateral data on bank deposits, we compare how offshore deposits from sanctioned versus non-sanctioned countries develop after the U.S. and the EU impose financial sanctions. Sanctions targeting individuals increase offshore deposits, as (potential) targets attempt to hide their funds. Broader financial sanctions reduce offshore (and other foreign) deposits, as money is repatriated. A synthetic control case study of Russia following the annexation of Crimea confirms our main findings, showing a 15% post-sanction increase in offshore deposits. These findings highlight the limits of symbolic sanctions and the need for secondary sanctions and financial surveillance. |
| Keywords: | Sanctions; tax havens; illicit financial flows |
| JEL: | F51 H12 K42 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:drx:wpaper:202536 |
| By: | Vîntu, Denis; Balaban, Georgiana |
| Abstract: | This paper presents two objectives: in the first part, we make a presentation of interest rate equations in a historical overview, from Irwing Fisher to John Maynard Keynes. Second part is designed to quarterly estimated structural macro econometric model for the Republic of Moldova, denoted A Classical Macroeconometric Data Model for the Republic of Moldova (MDM) in context of Neo-Classical Approach of the Economy. This model has been developed with four uses in mind: the assessment of economic conditions in the Republic of Moldova, macroeconomic forecasting, policy analysis and deepening understanding of the functioning of market economy. |
| Keywords: | Republic of Moldova, macroeconometric modelling, open and small economy; inflation; interest rate; economic growth; Classical economics; Keynesian economics. |
| JEL: | C13 E21 E30 E41 E44 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125856 |
| By: | Mariz Abdou; Hasan Dudu; Mrs. Kerstin Gerling; Dalia Kadissi |
| Abstract: | Taking the European Union’s Carbon Border Adjustment Mechanism (CBAM) as given, our paper evaluates the impact of this terms-of-trade shock on the Middle East and Central Asia (ME&CA). Using a novel methodology and fresh data applied to the latest CBAM legislation, we both quantify and decompose the financial burden countries face as their exports to the EU become subject to a greenhouse gas-based fee starting in January 2026. Our analysis reveals that while the average effects of CBAM in ME&CA are modest, the region will shoulder one of the highest burdens worldwide, totaling US$1.7 billion annually (equivalent to 0.03 percent of GDP and a 14 percent surcharge on CBAM exports to the EU). The Middle East, North Africa, Afghanistan, and Pakistan (MENAP) subregion will bear a greater share of this burden than the Caucasus and Central Asia (CCA) due to stronger trade ties with the EU and higher emission intensity. Substantial country- and sector-level differences in CBAM exposure emphasize the need for tailored policy responses to mitigate the broader macroeconomic effects. |
| Keywords: | Carbon Border Adjustment Measures; Carbon Leakage; Trade Policy; Middle East; Central Asia and Caucasus |
| Date: | 2025–09–12 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/182 |
| By: | Tanujit Chakraborty; Donia Besher; Madhurima Panja; Shovon Sengupta |
| Abstract: | Accurate forecasting of exchange rates remains a persistent challenge, particularly for emerging economies such as Brazil, Russia, India, and China (BRIC). These series exhibit long memory, nonlinearity, and non-stationarity properties that conventional time series models struggle to capture. Additionally, there exist several key drivers of exchange rate dynamics, including global economic policy uncertainty, US equity market volatility, US monetary policy uncertainty, oil price growth rates, and country-specific short-term interest rate differentials. These empirical complexities underscore the need for a flexible modeling framework that can jointly accommodate long memory, nonlinearity, and the influence of external drivers. To address these challenges, we propose a Neural AutoRegressive Fractionally Integrated Moving Average (NARFIMA) model that combines the long-memory representation of ARFIMA with the nonlinear learning capacity of neural networks, while flexibly incorporating exogenous causal variables. We establish theoretical properties of the model, including asymptotic stationarity of the NARFIMA process using Markov chains and nonlinear time series techniques. We quantify forecast uncertainty using conformal prediction intervals within the NARFIMA framework. Empirical results across six forecast horizons show that NARFIMA consistently outperforms various state-of-the-art statistical and machine learning models in forecasting BRIC exchange rates. These findings provide new insights for policymakers and market participants navigating volatile financial conditions. The \texttt{narfima} \textbf{R} package provides an implementation of our approach. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.06697 |
| By: | Vîntu, Denis |
| Abstract: | We contend that ambivalence or uncertainty regarding the error terms may be the root cause of many methodological misunderstandings in time-series econometrics. Macroeconomic time series have imprecise relationships, and early econometricians invariably discovered that any estimated relationship would only fit with errors. Second part is designed to quarterly estimated structural macro econometric model for the Republic of Moldova, denoted A Classical Macroeconometric Data Model for the Republic of Moldova (MDM) in context of Neo-Classical Approach of the Economy. We have interpreted the term error from the perspective of 7 macroeconomic indicators, namely Gross Domestic Product (error, pension), Inflation Rate (error, wage and salary, ) Interest Rate (error, unemployment) Unemployment Rate (error inflation rate), Budget Fiscal Deficit (error, ra-gap vat gap estimation), Public Debt (ra-gap vat gap estimation) and Exchange Rate (error, gross domestic product). |
| Keywords: | error term, time-series, dynamic models, simultaneous-equations models, interpretation, econometrics. |
| JEL: | B23 C15 C22 C30 C32 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125855 |
| By: | International Monetary Fund |
| Abstract: | Lithuania’s economy has proven resilient to multiple shocks in recent years and grew strongly in 2024. However, new challenges are emerging and long-standing issues still require attention. Defense spending is high and set to rise further, adding to other existing long-term spending pressures including from pensions. Income convergence with other euro area countries has been stalling lately while productivity growth remains weak. The global economic environment remains highly uncertain. |
| Date: | 2025–09–17 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfscr:2025/258 |